Advanced Energy Industries Inc (AEIS) 2017 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Advanced Energy Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Annie Leschin, Head of Investor Relations. Ma'am, you may begin.

女士們先生們，美好的一天，歡迎參加 Advanced Energy 收益電話會議。（操作員說明）作為提醒，正在錄製此電話會議。現在我想介紹一下今天會議的主持人，投資者關係主管 Annie Leschin 女士。女士，您可以開始了。

Thank you, operator and good morning everyone. Welcome to Advanced Energy's Third Quarter 2017 Earnings Conference Call. With me on today's call are Yuval Wasserman, President and CEO; and Tom Liguori, Executive Vice President and CFO. By now you should have received a copy of the earnings release that was issued yesterday afternoon. For a copy of this release, please visit our website at advancedenergy.com.

謝謝接線員，大家早上好。歡迎來到 Advanced Energy 2017 年第三季度收益電話會議。與我一起參加今天電話會議的有總裁兼首席執行官 Yuval Wasserman；執行副總裁兼首席財務官 Tom Liguori。到現在為止，您應該已經收到一份昨天下午發布的收益報告的副本。如需本新聞稿的副本，請訪問我們的網站 advancedenergy.com。

Before we begin, I'd like to remind everyone that except for historical financial information contained herein, matters discussed on this call contain certain forward-looking statements, subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Statements that include the terms believe, expect, plan, objective, estimate, anticipate, intent, target, goal or the like should be viewed as forward-looking and uncertain. Such risks and uncertainties are not limited to the volatility and cyclicality of the markets we serve, the timing of orders received from our customers and unanticipated changes in our estimates, reserves or allowances, as well as other factors listed in our press release. These and other risks are described in Forms 10-Q, 10-K and other forms filed with the SEC.

在我們開始之前，我想提醒大家，除了此處包含的歷史財務信息外，本次電話會議討論的事項包含某些前瞻性陳述，受已知和未知的風險和不確定性的影響，這些風險和不確定性可能導致實際結果與那些結果大不相同此類聲明明示或暗示。包含相信、預期、計劃、目標、估計、預期、意圖、目標、目標等術語的陳述應被視為前瞻性和不確定性。此類風險和不確定性不僅限於我們所服務市場的波動性和周期性、從我們的客戶那裡收到訂單的時間、我們的估計、儲備或配額的意外變化，以及我們新聞稿中列出的其他因素。這些風險和其他風險在提交給美國證券交易委員會的 10-Q 表格、10-K 表格和其他表格中進行了描述。

In addition, we assume no obligation to update the information that we've provided you during this call, including our guidance provided in yesterday's press release. Guidance will not be updated after today's call until our next scheduled quarterly financial release. Aspirational goals and targets discussed on this conference call or in the presentation material should not be interpreted in any respect as guidance. And just remember, in today's call, we will also be referring to GAAP and non-GAAP results. Non-GAAP measures exclude the impact of noncash-related charges, such as stock-based compensation and the amortization of intangible assets, as well as nonrecurring items such as acquisition-related costs. A reconciliation of non-GAAP income from operations and per share earnings is provided in the press release table. We will be referring to earnings slides posted on the Investor Relations section of our website.

此外，我們沒有義務更新我們在本次電話會議中向您提供的信息，包括我們在昨天的新聞稿中提供的指導。在我們下一次預定的季度財務發布之前，今天的電話會議之後不會更新指南。在本次電話會議或演示材料中討論的理想目標和目標不應在任何方面被解釋為指導。請記住，在今天的電話會議中，我們還將提到 GAAP 和非 GAAP 結果。非 GAAP 措施排除了非現金相關費用的影響，例如基於股票的薪酬和無形資產攤銷，以及收購相關成本等非經常性項目。新聞稿表中提供了非 GAAP 運營收入和每股收益的對賬。我們將參考發佈在我們網站投資者關係部分的收益幻燈片。

And with that, I'd like to turn the call over to Yuval Wasserman. Yuval?

有了這個，我想把電話轉給 Yuval Wasserman。尤瓦爾？

Thank you Annie, good morning everyone and thank you for joining us for our third quarter earnings conference call. Our 7th consecutive quarter of strong performance is a direct result of our ability to consistently deliver the highest quality, mission-critical, precision power solutions to our customers during this exciting and demanding period across all our product lines. It takes an incredibly talented global team and a world-class operation working in concert to capitalize on this extraordinary time in our business.

謝謝安妮，大家早上好，感謝您加入我們的第三季度收益電話會議。我們連續第 7 個季度取得強勁業績，這直接歸功於我們能夠在這個令人興奮和要求苛刻的時期，通過我們所有的產品線始終如一地為我們的客戶提供最高質量、關鍵任務、精密的電源解決方案。需要一支才華橫溢的全球團隊和世界一流的運營團隊共同努力，才能利用我們業務中的這段非凡時間。

Our singular focus on creating the most advanced power conversion technology to address our customers' next-generation products and technologies remains our #1 priority . Our commitment to constant innovation and tight customer engagement has allowed us to grow our leading position in the industry and once again post strong results for the third quarter. With an upward trend lasting nearly 2 years, the semiconductor business sustained its record level this quarter, while our Industrial business surged ahead, led by thin films, which had their highest quarter in 5 years.

我們專注於創造最先進的電源轉換技術以滿足客戶的下一代產品和技術，這仍然是我們的第一要務。我們對不斷創新和緊密客戶參與的承諾使我們能夠鞏固我們在行業中的領先地位，並再次在第三季度取得強勁業績。半導體業務在本季度保持了近 2 年的上升趨勢，保持了創紀錄的水平，而我們的工業業務在薄膜的帶動下飆升，創下 5 年來最高的季度業績。

Total revenue climbed to nearly $177 million, while non-GAAP earnings per share reached $1.19. Having generated $34 million in cash, we ended the quarter with $370 million, having completed a $25 million share repurchase and the acquisition of Excelsys. Our appetite for inorganic additions to our product and technology portfolio remains robust with an active pipeline of potential acquisitions.

總收入攀升至近 1.77 億美元，而非 GAAP 每股收益達到 1.19 美元。我們產生了 3400 萬美元的現金，在本季度結束時獲得了 3.7 億美元，完成了 2500 萬美元的股票回購和對 Excelsys 的收購。我們對在我們的產品和技術組合中添加無機物的興趣仍然強勁，並積極進行潛在收購。

In semiconductors, our advanced plasma processing products again enabled our business to continue at near-record pace. Growth of 44% year-over-year highlighted the accelerated demand for 3D NAND amidst the ongoing technology upgrades occurring throughout the industry. Demand for solid state drives and higher mobile content for handset drove the recovery in DRAM, while the ramp of 1x nanometer foundry logic also contributed.

在半導體領域，我們先進的等離子處理產品再次使我們的業務以接近創紀錄的速度繼續發展。同比增長 44%，突顯出在整個行業正在進行的技術升級中，對 3D NAND 的需求加速增長。對固態硬盤的需求和手機更高的移動內容推動了 DRAM 的複蘇，而 1x 納米代工邏輯的增長也做出了貢獻。

As the era of big data and artificial intelligence take hold, fab capacity expenses are driving the wafer fab equipment market to new highs and requiring more complex tools to address these advanced technologies. The semiconductor industry is facing exponential increases in data generation, greater complexity across virtually all end markets and higher capital intensity.

隨著大數據和人工智能時代的到來，晶圓廠產能支出將晶圓廠設備市場推向新高，並需要更複雜的工具來應對這些先進技術。半導體行業正面臨著數據生成的指數級增長、幾乎所有終端市場的複雜性以及更高的資本密集度。

For example, as we learn from our OEM and end-user customer, 64-layer 3D NAND is 60% more capital intensive than planar, while 14 to 16 nanometer DRAM is 40% more intensive than 25 nanometers and 7 nanometers logic is 100% more intensive than 28 nanometers. New materials and device structures are enabling these technologies. As device architectures become more complex with smaller geometries, more advanced processes, such as selective atomic layer deposition and atomic layer etch are necessary to accurately build device features. AE's position as an enabler is becoming even more critical to OEM customer road maps, as semiconductor manufacturers struggle to achieve acceptable yields of these higher complexity devices.

例如，正如我們從 OEM 和最終用戶客戶那裡了解到的那樣，64 層 3D NAND 的資本密集度比平面高 60%，而 14 至 16 納米 DRAM 比 25 納米高 40%，而 7 納米邏輯是 100%比 28 納米更密集。新材料和設備結構使這些技術成為可能。隨著設備架構變得越來越複雜，幾何尺寸越來越小，需要更先進的工藝，例如選擇性原子層沉積和原子層蝕刻，以準確構建設備功能。AE 作為推動者的地位對於 OEM 客戶路線圖變得更加重要，因為半導體製造商正在努力實現這些更高複雜性設備的可接受產量。

In the fourth quarter, we look for semiconductor revenues to increase over the third quarter, with memory in undersupply and fab utilization rates running high, capacity expansion in 3D NAND and DRAM is continuing. Coupled with recent CapEx increases, the wafer fab equipment industry is pointing towards an uptick in the fourth quarter and strength heading into 2018.

在第四季度，我們預計半導體收入將比第三季度有所增長，內存供應不足，晶圓廠利用率高，3D NAND 和 DRAM 的產能擴張仍在繼續。再加上最近資本支出的增加，晶圓廠設備行業在第四季度有望回升，並在 2018 年走強。

Our Industrial business had a strongest quarter in 5 years, climbing 36% over last year. In thin film applications, capacity expansion and demanding processes for consumer products coating drove the need for high performance process power requirements. We saw increased advanced power technology adoption in China for this functional and decorative coatings ahead of the holiday season. The significant recovery in glass coating this year helped bolster new capacity buys for coaters this quarter, adding to the large number of technology upgrades of existing lines across all regions. In the flat panel display, mobile wallet share gains in Korea contributed to the strong results with volume shipments of new advanced pulse DC technology.

我們的工業業務出現了 5 年來最強勁的季度，比去年增長了 36%。在薄膜應用中，消費品塗層的產能擴張和苛刻工藝推動了對高性能工藝功率的需求。在節日季之前，我們看到中國越來越多地採用這種功能性和裝飾性塗料的先進電力技術。今年玻璃鍍膜的顯著復甦幫助推動了本季度鍍膜機的新產能購買，增加了所有地區現有生產線的大量技術升級。在平板顯示器方面，韓國移動錢包份額的增加為新的先進脈衝直流技術的批量出貨量帶來了強勁的業績。

This quarter, specialty power products reached record level with strength from high voltage power solutions for mass spectrometry and scanning electron microscopes and power control modules for glass, solar cells, and lithium-ion battery applications. Coupled with full quarter contribution from our Excelsys acquisition, we are driving expansion across a strong and diverse customer base and outperforming our markets.

本季度，特種電源產品達到了創紀錄的水平，包括用於質譜和掃描電子顯微鏡的高壓電源解決方案以及用於玻璃、太陽能電池和鋰離子電池應用的電源控制模塊。加上我們收購 Excelsys 的整個季度貢獻，我們正在推動強大而多樣化的客戶群的擴張，並超越我們的市場。

We also added 3 new Rockwell channel partners, enhancing the distribution of our industrial product portfolio. Our long-term goal is to grow the industrial business at GDP plus 2 to 3 points. Year-to-date, we are substantially exceeding that with growth of 32% for the first 9 months. Given the collection of adjacent markets, an application that comprises this business, the timing of capital investment can cause fluctuations in any given quarter.

我們還增加了 3 個新的羅克韋爾渠道合作夥伴，加強了我們工業產品組合的分銷。我們的長期目標是使工業企業在 GDP 增長 2 到 3 個百分點的情況下增長。今年迄今，我們大幅超過前 9 個月 32% 的增長率。考慮到相鄰市場的集合，一個包含該業務的應用程序，資本投資的時機可能會導致任何給定季度的波動。

After the significant build-up we experienced in advanced coding capacity for consumer devices,, we anticipate a decline in revenues for the fourth quarter, as factories transition to volume production and prepare for the holiday season. With the market share gains we are making with new products and applications, we expect to continue to see year-over-year growth in the fourth quarter.

在消費設備的高級編碼能力顯著增強之後，我們預計第四季度的收入會下降，因為工廠會過渡到批量生產並為假期做準備。隨著我們通過新產品和應用程序獲得的市場份額增加，我們預計第四季度將繼續實現同比增長。

At AE, investing in innovation remains a core component of our strategy. Integral for increasing our role as an industry leader, the investment we make each and every quarter are deepening our relationship with our customers and ensuring that we are designed into the road maps across end markets. This quarter we increased our investment in demonstrations and evaluation units that we supply to both existing and new customers. In China, for example, we are seeding the market with our latest Ascent portfolio for consumer products coating to put AE technology into our customers' hands early in the development process. As a result, customers are realizing the benefits in real world applications and we are gaining a better understanding of the requirements for pilot production in anticipation for market trends. We see this as an important part of our philosophy to invest for the future by bringing innovative new products to market and expanding our SAM.

在 AE，投資於創新仍然是我們戰略的核心組成部分。為了加強我們作為行業領導者的角色，我們每個季度進行的投資都在加深我們與客戶的關係，並確保我們被設計成跨終端市場的路線圖。本季度，我們增加了對向現有和新客戶提供的演示和評估單元的投資。例如，在中國，我們正在為市場播種最新的 Ascent 消費品塗層產品組合，以便在開發過程的早期將 AE 技術交到客戶手中。因此，客戶在現實世界的應用中意識到了好處，我們也更好地了解了試生產的要求，以預測市場趨勢。我們認為這是我們通過將創新的新產品推向市場和擴展我們的 SAM 來投資未來的理念的重要組成部分。

In semiconductors, AE is enabling the applications that are driving the migration to more advanced memory and logic, such as plasma processes. Our continuing design wins are helping to ensure our growth, as the industry migrate to 10 nanometer technology and below. Our customers span geographies from North America to China, Korea, and Japan. This quarter, we won all of the design we pursued in advanced memory and logic application. Some of the most notable included a PEALD design for memory devices with an RF power solution, an etch design for a next-generation platform for advanced memory in sub-10 nanometer logic ,as well as a high voltage application. These design wins should transition into mass production roughly 1 to 2 years from acceptance, to reach high volume manufacturing and secure our growth well into the future.

在半導體領域，AE 正在推動推動向更先進的存儲器和邏輯遷移的應用，例如等離子工藝。隨著行業向 10 納米及以下技術遷移，我們持續的設計勝利有助於確保我們的增長。我們的客戶遍及從北美到中國、韓國和日本的各個地區。本季度，我們贏得了我們在高級內存和邏輯應用方面追求的所有設計。其中最著名的包括用於具有射頻電源解決方案的存儲設備的 PEALD 設計、用於亞 10 納米邏輯中高級存儲器的下一代平台的蝕刻設計，以及高壓應用。這些設計勝利應在驗收後大約 1 到 2 年內過渡到大規模生產，以實現大批量生產並確保我們在未來的發展。

Overall, we are gaining traction in a variety of industrial applications, markets, and geographies. In thin film industrial, we're gaining share in China with new and existing product penetration, including last quarter wins this quarter. Advanced products and technology products led to share gains in mobile OLED, solar PV, and consumer products coating, as process demands continued to grow.

總體而言，我們在各種工業應用、市場和地區都獲得了關注。在薄膜工業領域，我們正在通過新產品和現有產品滲透率（包括本季度贏得的上一季度勝利）在中國獲得份額。隨著工藝需求的持續增長，先進產品和技術產品在移動 OLED、太陽能光伏和消費產品塗層方面的份額增加。

In specialty power products this quarter, we secured thermal and PCM design in petrochemicals, PV solar wafer coating and furnace for thin film lithium-ion battery materials. We continue to win designs and grow in high voltage applications, including mass spectrometry, scanning electron microscopes, and X-ray, mainly due to our superior performance, providing a low ripple, stable power for high sensitivity metrology applications. Recent additions to our portfolio of low voltage, high-density configurable solutions have expended our SAM, leading to design wins in the medical, life science and analytical equipment applications as well.

在本季度的特種電源產品中，我們獲得了石化產品的熱和 PCM 設計、光伏太陽能晶圓塗層和薄膜鋰離子電池材料的熔爐。我們繼續贏得設計並在高壓應用中不斷發展，包括質譜、掃描電子顯微鏡和 X 射線，這主要歸功於我們卓越的性能，為高靈敏度計量應用提供低紋波、穩定的電源。我們的低電壓、高密度可配置解決方案產品組合的最新成員擴展了我們的 SAM，從而在醫療、生命科學和分析設備應用中也取得了設計勝利。

Our service business continues to excel, having grown 28% year-over-year in the third quarter to yet another high. Increasing effectiveness in deploying our strategy and serving our customers throughout the life cycle of our products is proving invaluable in this exceptional semiconductor environment. With utilization rates running high and end customer pushing to improve yields on increasingly complex processes, OEM service volumes are growing significantly, benefiting AE as well. Our close relationship with OEM customers and highly engineered service products are driving a sizable portion of our growth, total market share gains.

我們的服務業務繼續表現出色，第三季度同比增長 28%，再創新高。在我們產品的整個生命週期中提高部署我們的戰略和服務我們的客戶的效率在這個特殊的半導體環境中被證明是無價的。隨著利用率居高不下，終端客戶推動提高日益複雜的流程的產量，OEM 服務量正在顯著增長，AE 也從中受益。我們與 OEM 客戶的密切關係和高度工程化的服務產品正在推動我們的增長和總市場份額增長的很大一部分。

Recent expansion in China and Japan have positioned us closer to Asian customers, allowing us to serve them more quickly and cost-effectively. Together, these trends are resulting in an acceleration in our service revenue across the globe. Looking at the fourth quarter, we expect to see moderate sequential growth.

最近在中國和日本的擴張使我們更接近亞洲客戶，使我們能夠更快、更經濟地為他們提供服務。這些趨勢共同導致我們在全球範圍內的服務收入加速增長。展望第四季度，我們預計會出現溫和的環比增長。

In summary, we are on an accelerated trajectory to meet our aspirational goals. Our vision to capitalize on emerging demand drivers and balance investment with sustainable and profitable growth remain intact. Multi-year inflections are driving the industries we serve and reinforcing our perspective that our markets are becoming stronger. By engaging with our customers early in the development process and providing the most innovative products, we are staying at the forefront of this evolution.

總之，我們正在加速實現我們的理想目標。我們利用新興需求驅動力並平衡投資與可持續盈利增長的願景保持不變。多年的變化正在推動我們服務的行業，並強化我們的觀點，即我們的市場正在變得更強大。通過在開發過程的早期與客戶接觸並提供最具創新性的產品，我們一直處於這一發展的最前沿。

For the fourth quarter, we anticipate the growth in semiconductor business will largely offset the fluctuation in the industrial business, as we maintain overall revenue run rates close to the third quarter. Long term, as we look to maintain our trajectory of sustainable growth and outpace the markets we serve, we are committed to continuing to expand our portfolio, re-distribute our capital and achieve our aspirational goals.

對於第四季度，我們預計半導體業務的增長將在很大程度上抵消工業業務的波動，因為我們將整體收入運行率維持在接近第三季度的水平。從長遠來看，當我們希望保持可持續增長的軌跡並超越我們所服務的市場時，我們致力於繼續擴大我們的投資組合，重新分配我們的資本並實現我們的理想目標。

I'd like to thank our customers, partners, shareholders and our valued employees for their support. Thank you for joining us and we look forward to seeing many of you in the upcoming quarter.

我要感謝我們的客戶、合作夥伴、股東和我們尊貴的員工的支持。感謝您加入我們，我們期待在即將到來的季度見到你們中的許多人。

I'd like to turn the call right now to Tom. Tom?

我現在想把電話轉給湯姆。湯姆？

Thank you, Yuval. In the third quarter, we successfully executed on our growth strategy, exceeded our top line expectations and delivered strong bottom line results. Total revenue came in at a $176.6 million, up 6.5% sequentially and up 39.5% from a year ago. Non-GAAP operating margin was 31.9% compared to 31.8% in the second quarter and 29% last year. We also completed the acquisition of Excelsys and repurchased $25 million of stock. Our semiconductor business remains strong and our industrial and service businesses set new records this quarter.

謝謝你，尤瓦爾。在第三季度，我們成功地執行了我們的增長戰略，超出了我們的收入預期並取得了強勁的利潤結果。總收入為 1.766 億美元，環比增長 6.5%，同比增長 39.5%。非美國通用會計準則營業利潤率為 31.9%，而第二季度為 31.8%，去年為 29%。我們還完成了對 Excelsys 的收購併回購了 2500 萬美元的股票。我們的半導體業務依然強勁，本季度我們的工業和服務業務創下新紀錄。

Semiconductor sales of $116.5 million remained at near-record levels, as the capital equipment industry met the demand for more complex tools required for next-generation technology. This quarter, industrial revenue reached $35.9 million, up 36.6% from last quarter, driven by industrial coating capacity expansions and the acquisition of Excelsys.

半導體銷售額為 1.165 億美元，保持在接近歷史最高水平，因為資本設備行業滿足了對下一代技術所需的更複雜工具的需求。本季度，在工業塗料產能擴張和收購 Excelsys 的推動下，工業收入達到 3590 萬美元，比上一季度增長 36.6%。

Service revenue for the quarter was $24.2 million, an increase of 7.2% sequentially, as OEM service volume increased due to higher fab utilization rates. Non- GAAP operating margin of 31.9% was similar to last quarter, and a 290 basis point improvement over last year's 29.0%. Year-to-date, as sales have grown 41%, operating expenses have decreased significantly as a percent of total revenues, reflecting the leverage in our model, driving more to the bottom line.

本季度的服務收入為 2420 萬美元，環比增長 7.2%，這是由於晶圓廠利用率提高導致 OEM 服務量增加。非 GAAP 營業利潤率為 31.9%，與上一季度相似，比去年的 29.0% 提高了 290 個基點。今年迄今為止，隨著銷售額增長 41%，運營費用佔總收入的百分比顯著下降，反映了我們模型中的槓桿作用，推動了更多的利潤。

This quarter, we had a one-time tax benefit of $40 million related to the solar inverter business. Excluding this, our tax rate would have been 15.9% for the quarter. For 2017, we anticipate an annual tax rate of approximately 12% to 14%, excluding this one-time benefit. Longer term, we expect the tax rate to be in the mid-teens, reflecting the geographic mix of our global operations.

本季度，我們獲得了與太陽能逆變器業務相關的 4000 萬美元的一次性稅收優惠。排除這一點，我們本季度的稅率為 15.9%。對於 2017 年，我們預計年稅率約為 12% 至 14%，不包括這項一次性福利。從長遠來看，我們預計稅率將在十幾歲左右，這反映了我們全球業務的地域組合。

Due to the one-time tax benefit, GAAP EPS for the quarter was $2.09. Excluding this, GAAP EPS would have been $1.09, compared to $1.14 in the second quarter. In the second quarter, we benefited from an exceptionally low tax rate, resulting from a significant number of stock options exercised by employees. Similarly, non-GAAP EPS for the quarter was $1.19, at the high end of our expectations compared to $1.22 in the second quarter.

由於一次性稅收優惠，本季度 GAAP 每股收益為 2.09 美元。排除這一因素，GAAP 每股收益為 1.09 美元，而第二季度為 1.14 美元。在第二季度，由於員工行使了大量股票期權，我們受益於極低的稅率。同樣，本季度非美國通用會計準則每股收益為 1.19 美元，處於我們預期的高端，而第二季度為 1.22 美元。

Turning to the balance sheet. We generated $33.7 million of cash from continuing operations during the quarter. We ended the quarter with $369.6 million in cash and marketable securities, after using $25 million to buy back stock as part of our ongoing share repurchase authorization and $17.4 million for the purchase of Excelsys.

轉向資產負債表。本季度我們從持續經營中產生了 3370 萬美元的現金。在使用 2500 萬美元回購股票作為我們正在進行的股票回購授權的一部分，並使用 1740 萬美元購買 Excelsys 之後，我們在本季度結束時獲得了 3.696 億美元的現金和有價證券。

We continue to keep our focus on driving operational efficiency. Over the last 2 years, we've made sizable improvements in our working capital management. While there will be some fluctuations quarter-to-quarter, our net working capital days decreased by 5 days year-over-year to 72 days in the third quarter.

我們繼續專注於提高運營效率。在過去的 2 年裡，我們在營運資金管理方面取得了相當大的改進。雖然季度間會有一些波動，但我們第三季度的淨營運資金天數同比減少 5 天至 72 天。

Overall, with another solid financial performance this quarter, we are making significant progress towards our longer-term strategic and financial goals. Our ongoing investments in innovation and key acquisitions are expanding our addressable market and leveraging our cost model. All this while consistently returning value to our shareholders.

總體而言，憑藉本季度的另一項穩健財務業績，我們在實現長期戰略和財務目標方面取得了重大進展。我們在創新和關鍵收購方面的持續投資正在擴大我們的目標市場並利用我們的成本模型。所有這一切，同時始終如一地為我們的股東回報價值。

With that let me turn it over to the operator for questions. Operator?

有了這個，讓我把它交給接線員提問。操作員？

(Operator Instructions) Our first question comes from the line of Edwin Mok with Needham.

（操作員說明）我們的第一個問題來自 Edwin Mok 與 Needham 的對話。

So first I have on the semi side, Yuval you highlight a couple of good win rate for new wins that you guys talk about. And then also you guys have good exposure to the end markets. Just curious, is there a way to kind of think about how those win rates translate to revenue? I know that you mentioned it could be a few years out, just time from win to design. But maybe a good way to think about it is -- is there a way to think about what win rate you guys have won before and how that translate to your revenue now and any kind of metric or color you can provide around that?

所以首先我在半邊，Yuval 你強調了你們談論的新勝利的幾個良好勝率。然後你們也對終端市場有很好的了解。只是好奇，有沒有辦法考慮這些贏率如何轉化為收入？我知道你提到它可能需要幾年時間，只是從獲勝到設計的時間。但也許考慮它的一個好方法是——有沒有辦法考慮你們以前贏得的贏率，以及這如何轉化為你們現在的收入，以及你們可以提供的任何類型的指標或顏色？

Edwin, this is a great question. What's I think new right now in the semi industry is that the pace of changing from one technology, I wouldn't even call it node, but one technology tool set to the next one is accelerated. And what we see is end use customers moving from one memory generation to the next. There is a new set of tools that are being developed, especially in the 3D NAND, when you have really accelerated growth in the complexity of the devices and aspect ratios. The increase in aspect ratio requires a different power distribution for etchers, that will be able to effectively go all the way down to the depth of the trenches of the contacts. That requires either new set of power supplies or derivative of existing power supplies. And the interesting thing about this generation of the era we live in right now is that the pace of adopting these new tools is much faster, which require from us a very strong engagement with our customers from an early stage to ensure that they have their tools ready when the fabs are ready to start the production for the next node or next memory device. So yes, there is an acceleration and we believe that in semi the transition of these design wins into mass production is faster than what we saw in the past. When we talked in the script, we talked about the 1 to 2 years adoption to mass production. That was mainly the industrial section.

埃德溫，這是一個很好的問題。我認為半導體行業現在的新變化是從一種技術轉變的步伐，我什至不稱其為節點，但一種技術工具集到下一種技術工具集的速度正在加快。我們看到的是最終使用客戶從一代內存轉移到下一代。有一套新的工具正在開發中，特別是在 3D NAND 中，當你真正加速了設備複雜性和縱橫比的增長時。縱橫比的增加需要蝕刻機的不同功率分配，這將能夠有效地一直深入到接觸溝槽的深度。這需要一套新的電源或現有電源的衍生產品。我們現在生活的這一代有趣的是，採用這些新工具的速度要快得多，這需要我們從早期階段就與客戶進行非常密切的接觸，以確保他們擁有自己的工具當晶圓廠準備好開始生產下一個節點或下一個存儲設備時。所以是的，有一個加速，我們相信這些設計勝利到大規模生產的轉變比我們過去看到的要快。當我們在劇本中討論時，我們談到了 1 到 2 年的採用到大規模生產。那主要是工業部門。

I see, okay great. That's interesting -- helpful color. And then since you mentioned Industrial, I have a question around that. You mentioned that thin film was a big driver this quarter and you expect a pullback in the coming quarter. Sometimes the thin film market can become lumpy. Is there any risk that that could be -- we could have with this low level thin film spending for a few quarters, until sometimes maybe 3, 4 quarters out before we have an high jump, or how do we kind of think about that?

我明白了，很好。這很有趣——有用的顏色。然後既然你提到了工業，我有一個問題。你提到薄膜是本季度的一大推動力，你預計下一季度會出現回調。有時薄膜市場會變得不穩定。這是否存在任何風險——我們可能會在幾個季度內使用這種低水平的薄膜支出，直到有時可能需要 3、4 個季度才能跳高，或者我們如何考慮這一點？

So specifically this, in Q3, also Q2 this year, we enjoyed a significant growth in our thin film, especially hard coating and optical coating business, driven by consumer electronic products. And obviously these products usually are geared towards mass production before the holiday season. So our revenue in Q2 and Q3 was especially geared for building the capacity in the factories that make those devices. Q4, obviously, there will be less investment in equipment for these factories, as they move to mass production. We expect to see resumption of the investment in capacity next year as these factories are geared for next-generation devices and we have enough indication to believe that we will continue to grow in the area of hard coating, optical coatings and decorative coating for consumer products. The other thing that is very interesting, we are becoming the standard. As we start be an enabler for highly engineered advanced materials for consumer products coating, many companies end-use customers are adopting our technology, because we have been proven to deliver on this unique set of new materials that are going to market. So we see a propagation both with technology nodes migration and the new investment in capacity, but also expanding our footprint and serving more customers as they're adopting our technology.

因此，具體來說，在第三季度，也是今年第二季度，我們的薄膜，特別是硬塗層和光學塗層業務在消費電子產品的推動下實現了顯著增長。顯然，這些產品通常是為了在節日季前進行大規模生產。因此，我們在第二季度和第三季度的收入特別適用於提高製造這些設備的工廠的產能。Q4，顯然，隨著這些工廠轉向大規模生產，他們對設備的投資將會減少。我們預計明年將恢復產能投資，因為這些工廠面向下一代設備，我們有足夠的跡象相信我們將在消費產品的硬塗層、光學塗層和裝飾塗層領域繼續增長.另一件非常有趣的事情是，我們正在成為標準。隨著我們開始成為用於消費品塗層的高度工程化先進材料的推動者，許多公司的最終用戶正在採用我們的技術，因為我們已被證明可以提供這套即將上市的獨特新材料。因此，我們看到了技術節點遷移和新容量投資的傳播，同時也擴大了我們的足跡並為更多客戶提供服務，因為他們正在採用我們的技術。

Okay, great that's helpful. Last question I have, just on capital allocation and I guess around M&A. You guys have talked about working through an M&A pipeline and so far you've done 1 deal, smaller deal. Just curious, any update on that pipeline, do you expect to anticipate any kind of transaction to happen, let's say, in the next 12 months? And I noticed that you bought back $25 million this quarter. Since you're generating good level of cash, why not buy back more stock?

好的，太好了，很有幫助。我有最後一個問題，只是關於資本配置，我想是關於併購的。你們談到了通過併購管道進行工作，到目前為止你們已經完成了一筆交易，規模較小。只是好奇，關於該管道的任何更新，您是否預計會在未來 12 個月內發生任何類型的交易？我注意到你本季度回購了 2500 萬美元。既然你產生了大量的現金，為什麼不回購更多的股票呢？

So we do have a very active pipeline of target acquisitions. As you know and we talked about it very openly, we're very structured and very disciplined about how we do this. We have hurdles that we want to make sure that, that all the opportunities have to meet. And we expect to see additional acquisitions happening in the next few quarters. Our shares repurchase is not in lieu of acquisitions, it's something that we have put in plan more than 1.5 years ago, and we continue to pursue that in a way that allows us to manage our share count, but also to time these buybacks effectively. So these are not competing efforts, but rather complementary efforts. Regarding the acquisitions, we do have in the pipeline both small and large acquisitions. We're expecting to continue to pursue those. The way we look at our acquisitions is very strategically, they have to be a good fit in terms of the application space, in terms of the product and technologies they bring, and in terms of the operational make-up of these companies. Tom do you want to add anything to that?

所以我們確實有一個非常活躍的目標收購渠道。正如你所知，我們非常公開地談論過它，我們在如何做這件事上非常有條理，也非常有紀律。我們有障礙，我們想要確保，所有的機會都必須滿足。我們預計在接下來的幾個季度會發生更多的收購。我們的股票回購不能代替收購，這是我們 1.5 多年前就計劃好的事情，我們將繼續以一種既能管理股票數量又能有效安排回購時間的方式進行。所以這些不是相互競爭的努力，而是互補的努力。關於收購，我們確實正在進行小型和大型收購。我們期望繼續追求這些。我們看待收購的方式非常具有戰略意義，它們必須非常適合應用領域、所帶來的產品和技術，以及這些公司的運營構成。湯姆，你想補充什麼嗎？

No, thank you Yuval.

不，謝謝尤瓦爾。

And our next question comes from the line of Krish Sankar with Bank of America.

我們的下一個問題來自美國銀行的 Krish Sankar。

I had a few of them. Yuval, if I look at your semi revenue compared with your closest peer, MKSI, for the last 5 years you guys have actually outgrown. I mean kudos to both of you for having outgrown the WFE, but on a relative basis, your semi revenues have been -- the growth has been better than MKSI for the last 5 years, but this year it looks like it's relatively slowing compared to MKSI. So I'm kind of curious, is there something going on in terms of market share or is it just a timing issue?

我有幾個。Yuval，如果我看看你與最接近的同行 MKSI 相比的半年收入，在過去的 5 年裡，你們實際上已經超越了。我的意思是感謝你們兩個已經超越了 WFE，但相對而言，你們的半收入一直是——過去 5 年的增長一直好於 MKSI，但今年看起來相對放緩MKSI。所以我有點好奇，在市場份額方面是否發生了一些事情，或者這只是一個時間問題？

I don't think it's timing and I don't think it's market share issue. I think that when we look at these 2 companies and MKS is a good company, but when you compare the 2 companies, it's not apples-to-apples. Right? The product portfolio of MKS is very different from ours. And if I rely on third-party analysis, we continue to lead in market share, our market share I think is maybe 2.5x that of MKS. We are a pure play power company. And if you look at our revenue growth, compared to previous quarter, we did better than MKS and compared to last year, we did better than MKS. So we continue to outperform. We continue to grow. I think the 1 thing that may skew the picture optically is that I think their product portfolio has dramatically changed after the acquisition of Newport. So I think that we -- it's difficult to compare apples-to-apples, because the companies have totally different portfolios.

我不認為這是時機，我不認為這是市場份額問題。我認為，當我們審視這兩家公司時，MKS 是一家不錯的公司，但當您比較這兩家公司時，它並不是同類公司。正確的？MKS 的產品組合與我們的非常不同。如果我依靠第三方分析，我們繼續領先市場份額，我認為我們的市場份額可能是 MKS 的 2.5 倍。我們是一家純粹的電力公司。如果你看一下我們的收入增長，與上一季度相比，我們的表現優於 MKS，與去年相比，我們的表現優於 MKS。所以我們繼續跑贏大盤。我們繼續成長。我認為可能從視覺上扭曲圖片的一件事是我認為他們的產品組合在收購 Newport 後發生了巨大變化。所以我認為我們——很難將蘋果與蘋果進行比較，因為這些公司擁有完全不同的投資組合。

Krish, I would add, I think if you look at our guidance going forward, we're forecasting up versus some of our peers flat-to-down.

Krish，我想補充一點，我想如果你看看我們未來的指導，我們預測的是與我們的一些同行持平到下降。

Got it, all right. And then a couple of other questions. Did you guys say what the gross margin the industrial and services business was in Q3?

明白了，好的。然後是其他幾個問題。你們有沒有說第三季度工業和服務業務的毛利率是多少？

No, but you can see it is actually -- it was very healthy, it was a little over 49%. It's in our income statement in the press release.

不，但你可以看到它實際上是——它非常健康，略高於 49%。它在我們新聞稿的損益表中。

Okay, got you. Alright. And then 1 other question is, is OLED as a percentage of total revenue still under 5% at this point?

好的，明白了。好吧。然後另一個問題是，OLED 佔總收入的百分比目前是否仍低於 5%？

OLED continues to be small. Although we continued to gain share for the applications we serve, it's a small sliver of the total pie of revenue for AE.

OLED 仍然很小。儘管我們繼續獲得我們服務的應用程序的份額，但這只是 AE 總收入的一小部分。

Got it, got it. And then the last question I had is, if I look at your customers, like AMAT and all these guys on the display side, or even OLED side, they have really long lead times, almost close to a year and they have a pretty good visibility into 2018. How does their long lead time translate into your shipment schedule?

明白了，明白了。然後我的最後一個問題是，如果我看看你的客戶，比如 AMAT 和顯示器方面的所有這些人，甚至是 OLED 方面，他們的交貨時間真的很長，幾乎接近一年，而且他們有很好的2018 年的可見性。他們的長交貨期如何轉化為您的裝運時間表？

Their lead time doesn't really affect our -- as you know, we have just-in-time arrangement with our key customers. We don't have long lead time products for them. They pull our product when they need them.

他們的交貨時間並沒有真正影響我們——如你所知，我們與主要客戶有及時安排。我們沒有為他們準備長交貨期的產品。他們在需要時拉我們的產品。

And our next question comes from the line of Weston Twigg with KeyBanc Capital Markets.

我們的下一個問題來自 KeyBanc Capital Markets 的 Weston Twigg。

First, just wanted to follow up on the tax situation. I think the rate for 2017 increased this quarter from the guidance last quarter, I think the guidance was around 9% and now it's 12% to 14% for the year. Just wonder if you could help us understand what's moving around in the tax line, a little bit better.

首先，只想跟進稅收情況。我認為本季度 2017 年的利率比上一季度的指導有所提高，我認為指導約為 9%，而現在全年為 12% 至 14%。只是想知道您是否可以幫助我們更好地了解稅收方面的變化。

Yes, our tax rate went up. We had a change in the geographic mix, but more importantly, we made some changes internally. We had some inter-company sale of assets from one entity to another, things that we thought really better positioned us for the next 3 years and part of the strategic plan. And associated with that, in the quarter, there were some additional tax on those transactions. So I think the way I would look at tax, is the way we look at it long-term is use a tax rate -- we model a tax rate in the mid-teens and that continues to be a good number, hopefully it's a conservative number.

是的，我們的稅率上升了。我們改變了地域組合，但更重要的是，我們在內部進行了一些改變。我們將一些公司間的資產從一個實體出售給另一個實體，我們認為這些東西確實能更好地為我們在未來 3 年做好準備，並且是戰略計劃的一部分。與此相關的是，在本季度，對這些交易徵收了一些額外稅。所以我認為我看待稅收的方式是，我們長期看待它的方式是使用稅率——我們在十幾歲中期建立一個稅率模型，這個數字仍然是一個很好的數字，希望它是一個保守數字。

Okay, that's helpful. But just also wondering if you could help us understand maybe some of the semiconductor demand trends and your expected industrial growth rate for 2018. So just looking out into next year, what you're seeing?

好的，這很有幫助。但也想知道您是否可以幫助我們了解一些半導體需求趨勢以及您對 2018 年的預期工業增長率。那麼展望明年，你看到了什麼？

Let me respond to that qualitatively. We expect the semiconductor business to continue to grow. We expect the first half of next year to be higher than the second half of this year. We expect the next quarter -- I mean we expect Q4 to be stronger than Q3 and Q1 stronger than Q4. Beyond that, we're not -- we don't have enough visibility to quantify that. When it comes to the industrial part of the business, we originally aimed at growing at GDP plus 2 to 3 points. We're demonstrating much stronger than that. Obviously, we enjoy from this very large investment in coating for consumer electronic products. What we expect to see going forward will be a continuing growth in the industrial. We believe that we will continue to grow faster than the markets we serve.

讓我定性地回應一下。我們預計半導體業務將繼續增長。我們預計明年上半年會高於今年下半年。我們預計下一季度——我的意思是我們預計第四季度將強於第三季度，第一季度將強於第四季度。除此之外，我們不是 - 我們沒有足夠的可見性來量化它。在業務的工業部分，我們最初的目標是在 GDP 基礎上增長 2 到 3 個百分點。我們正在展示比這更強大。顯然，我們從這項對消費電子產品塗層的巨額投資中受益。我們期望看到的未來將是工業的持續增長。我們相信，我們的增長速度將繼續快於我們所服務的市場。

Okay. So industrial growth maybe ahead of that GDP plus 2% to 3%?

好的。那麼工業增長可能會超過 GDP 增長 2% 到 3%？

That's correct.

這是正確的。

So, still next year, okay. And then finally, if you have any thoughts on operating margin trends into 2018, that would be helpful. I know that it's been bouncing around a lot, but it's been running quite high, it could be impacted by M&A, but if any color into 2018 will be helpful.

所以，還是明年，好吧。最後，如果您對 2018 年的營業利潤率趨勢有任何想法，那將很有幫助。我知道它一直在反彈很多，但它一直運行得相當高，它可能會受到併購的影響，但如果 2018 年的任何顏色都會有所幫助。

Sure, really no change in our model. We expect gross margins to be flattish. The way we view the gross margin line is that we give our customers price concessions and our job is to get supply chain savings to offset those. And that's why those will be flat, though we continue to get some leverage in the operating expenses. So when you look at the total model with operating margin, yes, there continues to be volume leverage potential and I think you saw this in the current quarter, our gross margin, because of mix, was down about, I think, 30 basis points, but our operating margin more than made up for it and was actually up 10 points.

當然，我們的模型真的沒有變化。我們預計毛利率將持平。我們看待毛利率線的方式是我們給客戶價格優惠，我們的工作是讓供應鏈節省下來抵消這些優惠。這就是為什麼這些將持平的原因，儘管我們繼續在運營支出中獲得一些影響力。因此，當您查看具有營業利潤率的總體模型時，是的，仍然存在數量槓桿潛力，我認為您在本季度看到了這一點，由於混合，我們的毛利率下降了大約 30 個基點，但我們的營業利潤率足以彌補這一損失，實際上上升了 10 個百分點。

And our next question comes from the line of Amanda Scarnati with Citi.

我們的下一個問題來自花旗銀行的 Amanda Scarnati。

Just kind of continuing on the industrial acquisition pipeline, when you look at kind of growing that business, you mentioned 2 to 3 points above GDP. I am assuming that means excluding any acquisitions that you do. Are you still on track to hit that $150 million in acquisitions target by the end of 2018 or is that sort of [internal brake] it's a little pushed out, or less confidence in hitting that target at this point?

只是繼續工業收購管道，當你考慮增長該業務時，你提到了比 GDP 高出 2 到 3 個百分點。我假設這意味著排除你所做的任何收購。您是否仍有望在 2018 年底之前實現 1.5 億美元的收購目標，或者這種 [內部剎車] 它有點被推出，或者在這一點上對實現該目標信心不足？

Amanda, we are confident that we can achieve that within the next -- the 3 years window we declared. We do have active pipeline of acquisitions. The growth rate we talked about at GDP plus 2 to 3 points was obviously an organic number. As we acquire in the industrial domain, we expect to accelerate the growth.

阿曼達，我們相信我們可以在下一個 - 我們宣布的 3 年窗口內實現這一目標。我們確實有積極的收購渠道。我們講的GDP增速加2到3個百分點，顯然是有機數字。隨著我們在工業領域的收購，我們預計會加速增長。

Are you seeing any sort of increased competition in your acquisition pipeline, or has it kind of been the same over the last year or 2?

您是否看到您的收購渠道中存在任何形式的競爭加劇，或者在過去一兩年中是否存在某種競爭？

Not really. What we see in general, in general we see higher valuations that we saw 2 or 3 years ago. Obviously, the environment is more robust and the multiples are more frothy. So we are very careful in the way we look at our acquisitions. The last 5 acquisitions we have made during the last 3 or 4 years, all of them are very successful, accretive, contributing to profit, into cash flow and growing. So that's what we would like to do, is to continue to adhere to our very rigorous method of scouting, scoping and acquiring and integrating businesses, because at the end of the day, it's all about growth, we want to buy businesses and grow them.

並不真地。我們總的來說，我們看到的估值高於 2 或 3 年前。顯然，環境更穩健，倍數更泡沫。因此，我們在看待收購的方式上非常謹慎。我們在過去 3 或 4 年中進行的最後 5 次收購，所有這些都非常成功，增值，為利潤、現金流和增長做出了貢獻。所以這就是我們想要做的，就是繼續堅持我們非常嚴格的偵察、範圍界定、收購和整合業務的方法，因為歸根結底，一切都與增長有關，我們想收購業務並發展它們.

And then just on the Excelsys acquisition, how much revenue did they contribute this quarter and did you see any sort of impact on margin in your industrial business because of that acquisition?

然後就 Excelsys 的收購而言，他們在本季度貢獻了多少收入？您是否看到此次收購對您的工業業務的利潤率產生了任何影響？

Sure. Little over $3 million of revenue and that's pretty much the run rate, accretive to earnings.

當然。略高於 300 萬美元的收入，這幾乎是運行率，增加了收益。

And our next question comes from the line of Pavel Molchanov with Raymond James.

我們的下一個問題來自 Pavel Molchanov 和 Raymond James 的台詞。

First 1 about industrials in the context of your aspirational targets. I remember at the start of this year you were talking about kind of in the medium term getting industrials to 1/3 of total top line, but this past quarter, which was a standout quarter for industrials, it was 20%. So barely half of kind of what you guys are targeting. So are you -- is it still realistic for you to get to 30% plus Industrial weighting, or are you perhaps kind of rethinking that percentage?

第 1 個是關於在您的理想目標背景下的工業。我記得在今年年初你曾談到在中期讓工業股佔總營收的 1/3，但上個季度是工業股的一個突出季度，它是 20%。所以只有你們目標的一半。你也是——達到 30% 以上的工業權重是否仍然現實，或者你是否正在重新考慮這個百分比？

We still adhere to that aspirational goal, and we believe that we're very realistic. This is not a short-term goal Pavel and it's a long-term goal.

我們仍然堅持這個理想的目標，我們相信我們是非常現實的。這不是 Pavel 的短期目標，而是一個長期目標。

Okay. And then on taxes. So I'm assuming you're giving your guidance in the context of the status quo. If we were to get tax reform along the lines of what the speculation is 20% U.S. corporate rate, what would that mid-teens company blended rate, how would that change for you guys specifically?

好的。然後是稅收。所以我假設你是在現狀的背景下給出你的指導。如果我們按照推測的美國公司稅率為 20% 的方式進行稅制改革，那家十幾歲的公司混合稅率是多少，這對你們來說會有什麼具體變化？

It would have a smaller impact, it would be a benefit too Pavel, but it's not going to be drastic. We already have a very good tax structure. I would add that this benefit we took, the way to think of that is that it's similar to an NOL. So we're going to pay less cash taxes than reported going forward and that's going to help increase our cash flows. So we put a lot of time and effort on this tax structure. We believe it's very solid compliance wise, which is really important to that. And when we look at tax reform, things like repatriation, that's great, things like lower tax, that's great. So -- but we have to wait and see what the proposal is, correct?

它會產生較小的影響，這對 Pavel 也有好處，但不會太劇烈。我們已經有了非常好的稅收結構。我要補充一點，我們獲得的這種好處，認為它類似於 NOL。因此，我們將支付比報告的未來更少的現金稅，這將有助於增加我們的現金流。所以我們在這個稅收結構上投入了大量的時間和精力。我們相信這是非常可靠的合規性，這對此非常重要。當我們看稅收改革時，諸如匯回之類的事情很棒，諸如降低稅收之類的事情也很棒。所以——但我們必須拭目以待，看看提案是什麼，對嗎？

And our next question comes from the line of Patrick Ho with Stifel Nicolaus.

我們的下一個問題來自 Patrick Ho 與 Stifel Nicolaus 的對話。

Yuval, first in terms of your services business, you've seen your customers also kind of involved in that business area themselves where they're trying to add more value for their customers, and you talked a little bit about that on the call today. Given the gross margin improvement we've seen, can you give a little bit, or an example, of some of the changes on your services end, where you're trying to provide more value-added for your customers?

Yuval，首先就您的服務業務而言，您已經看到您的客戶自己也參與了該業務領域，他們試圖為客戶增加更多價值，您今天在電話中談到了這一點.鑑於我們看到的毛利率提高，您能否舉例說明您服務端的一些變化，您正試圖在這些變化中為您的客戶提供更多附加值？

Okay, the first -- thanks Patrick -- the first value-add we bring to our customers is shortening the distance from us to them by placing new repair facilities in some strategic areas. Two examples, Jian in China, we have a new repair lab in the technical/technology trade -- free trade zone that allows us to significantly increase our responsiveness, reduce turnaround time and reduce the cost of logistics and freight and duties. That's tangible value for our customers. We have a similar investment active lab that we opened in Tachikawa in Japan. That is doing the same thing. So this is more of the repair aspect or part of the service business. In addition, we continue to offer our customers, which we call the non-break fees solution, it's highly engineered upgrades, retrofits solutions and products that extend the lifetime of our legacy products, that increase the capability and the performance of products that are already installed in field, and the result of that, reduce the total cost of ownership for our customers and their customers. So it's all basically value-driven and for that reason, we see an increase in our market share as we get more and more repair and business revenue coming back to us and away from the third-party repair shops.

好的，首先 - 感謝帕特里克 - 我們為客戶帶來的第一個增值是通過在一些戰略區域放置新的維修設施來縮短我們與他們的距離。兩個例子，Jian 在中國，我們在技術/技術貿易 -- 自由貿易區有一個新的維修實驗室，這使我們能夠顯著提高我們的響應能力，減少周轉時間並降低物流和運費和關稅的成本。這對我們的客戶來說是有形的價值。我們在日本立川開設了一個類似的投資活躍實驗室。那是在做同樣的事情。所以這更多是維修方面或服務業務的一部分。此外，我們繼續為我們的客戶提供我們稱之為不間斷收費解決方案，它是高度工程化的升級、改造解決方案和產品，可以延長我們的舊產品的使用壽命，提高已經存在的產品的能力和性能安裝在現場，其結果是降低了我們客戶及其客戶的總擁有成本。所以這基本上都是價值驅動的，因此，我們看到我們的市場份額增加，因為我們得到越來越多的維修和業務收入回到我們身邊，遠離第三方維修店。

Great, that's helpful. And maybe as a follow-up, the strength in the semi business that I also believe will go into the early parts of 2018. You gave quite a bit of visibility that typically a lot of times component suppliers don't usually get. Is that changing with you and your customers? Are they giving you more lead times than you've seen in the past? And I guess most importantly, from your end, how do you react as they extend some of the lead time for you?

太好了，這很有幫助。也許作為後續行動，我也相信半導體業務的實力將進入 2018 年初。您提供了相當多的可見性，通常很多時候組件供應商通常不會獲得。這會隨著您和您的客戶而改變嗎？他們給你的交貨時間是否比你過去看到的要長？我想最重要的是，從您的角度來看，當他們為您延長一些交貨時間時，您有何反應？

It is different, Patrick, and I cannot give you details, but in general I can give you -- we received formal notices from almost all of our customers, asking us to be ready for the ramp. And it's not a big surprise, we're expecting to see continuing ramp, at least through the first half of next year. And we have a very effective, very agile and nimble operation. We do not see any challenge to address the needs, both in terms of volume, mix, and delivery time.

帕特里克，這是不同的，我不能給你細節，但總的來說我可以給你——我們收到了幾乎所有客戶的正式通知，要求我們為坡道做好準備。這並不令人意外，我們預計至少在明年上半年會持續增長。我們有一個非常有效、非常敏捷和靈活的操作。我們認為在數量、組合和交付時間方面滿足需求沒有任何挑戰。

Our next question comes from the line of Mehdi Hosseini with SIG.

我們的下一個問題來自 SIG 的 Mehdi Hosseini。

Yuval, just back to your prior comment, you said your OEM customers are asking to be ready for the ramp. Your Q3 semiconductor revenue was up by more than 40% on a year-over-year basis. So can you help us understand what do you mean by the ramp?

Yuval，回到你之前的評論，你說你的 OEM 客戶要求為爬坡做好準備。你們第三季度的半導體收入同比增長超過 40%。那麼你能幫助我們理解斜坡是什麼意思嗎？

Ramp means increase quarter-over-quarter.

斜坡意味著季度環比增長。

Okay. So is that more than just a single-digit growth that you have [guided]?

好的。那麼，這不僅僅是您 [指導] 的個位數增長嗎？

I can't give you specific numbers Mehdi. All I can tell you that we have indications coming from the market that we should be ready to increase our delivery and capacity of product. Basically the number of units we ship every will increase going forward.

我不能給你具體數字 Mehdi。我只能告訴你，我們有來自市場的跡象表明我們應該準備好增加產品的交付和產能。基本上，我們每次發貨的單位數量都會增加。

Okay. You have a pretty good insight into the 3D NAND technology that has enabled you to outgrow revenue by a significant factor compared to the overall WFE's band. In that context, how do you see the evolution of 3D NAND, especially with stacking of the stacks? Is that going to change the power supply content for you, or is that neutral, the stacking of the stacks?

好的。你對 3D NAND 技術有很好的洞察力，與整個 WFE 的樂隊相比，它使你的收入增長超過了一個重要因素。在這種情況下，您如何看待 3D NAND 的發展，尤其是堆棧的堆疊？這會改變你的電源內容，還是中性的，堆棧的堆疊？

It's a good question, Mehdi. The answer is yes. What we are seeing, as the industry goes into more layers in the 3D NAND, as I mentioned earlier in the first question, the aspect ratios are becoming very challenging and they require, in many cases, higher power, better control, and very sophisticated way to pulse the RF power to be able to process these very challenging architectures. In addition, we see additional applications driven by new materials and new process technologies. All in all, what we see is increase in the power density delivered into the chambers, and with that more complex power supplies, which will drive potentially higher ASPs.

這是個好問題，邁赫迪。答案是肯定的。我們所看到的是，隨著行業進入 3D NAND 的更多層，正如我之前在第一個問題中提到的那樣，縱橫比變得非常具有挑戰性，在許多情況下，它們需要更高的功率、更好的控制和非常複雜的脈衝 RF 功率的方法，以便能夠處理這些非常具有挑戰性的架構。此外，我們還看到了由新材料和新工藝技術驅動的其他應用。總而言之，我們看到的是輸送到腔室中的功率密度增加，以及更複雜的電源，這將推動潛在的更高 ASP。

But does that change with the number of stacks, is there a maximum number of layers above and beyond which --

但這是否會隨著堆棧的數量而變化，是否有最大層數超過這個數量——

It changes with the increase in number of layers. But obviously, Mehdi, a really strong function of the architecture of the chamber itself. And if we look at the top 3 or 4, actually the companies they do not have the same architecture and the same design. So depends on the actual process chamber architecture. You will see a change in the power content delivered, as the devices become more challenging.

它隨著層數的增加而變化。但很明顯，Mehdi，密室本身的建築功能非常強大。如果我們看看前 3 或 4 家公司，實際上他們沒有相同的架構和設計。所以取決於實際的工藝室結構。隨著設備變得更具挑戰性，您會看到所提供的強大內容髮生了變化。

Okay. One more question here, just a clarification. Would you see a scenario in the next 1 or 2 years that your customers would actually -- the end customer would actually stack more than 2 stacks?

好的。這裡還有一個問題，只是澄清一下。您是否會在未來 1 年或 2 年內看到您的客戶實際上 - 最終客戶實際上會堆疊超過 2 個堆疊的場景？

I don't know really. I don't have enough knowledge of that.

我真的不知道。我對此了解不夠。

Okay. And then looking at the overall trend, it seems like based on what your OEM customers have elaborated or discussed, WFE could grow at the growth rate of, like, 5% through the turn of the decade, and given what he has done over the past few years, would it be fair to say that you can grow your semiconductor revenue at 3x that growth rate looking forward?

好的。然後看看總體趨勢，似乎根據您的 OEM 客戶闡述或討論的內容，WFE 可以在十年之交以 5% 的增長率增長，並且考慮到他在過去十年中所做的一切在過去的幾年中，可以公平地說您可以將您的半導體收入以 3 倍的增長率增長嗎？

I don't know. In general, we have demonstrated our ability to grow faster than the markets we serve. Our aspirational goal is to continue to do that. The last time we presented publicly, we talked about our CAGR for the last 4 or 5 years was 17%. So double-digit growth rate in this environment is not out of question.

我不知道。總的來說，我們已經證明我們有能力比我們所服務的市場增長得更快。我們的理想目標是繼續這樣做。上次我們公開展示時，我們談到過去 4 或 5 年的複合年增長率為 17%。因此，在這種環境下實現兩位數的增長率並非毫無疑問。

Is there any technological change that could make your growth rate more or less, so that we could think about growth rates that would be above or beyond the historical trend rates?

是否有任何技術變化可以使您的增長率或多或少，以便我們可以考慮高於或超過歷史趨勢增長率的增長率？

Well, we continue to invest significantly in innovation and in new technologies for the next generation power distribution for plasma processes. Some of these new technologies are being evaluated right now. We believe if the adoption rate will be fast and we will continue to remain the enabler for the industry, we may see acceleration of growth. But it depends on the success of these technologies and the adoption.

好吧，我們將繼續在創新和新技術方面進行大量投資，以用於等離子工藝的下一代配電。目前正在評估其中一些新技術。我們相信，如果採用率很快，並且我們將繼續保持行業的推動力，我們可能會看到增長加速。但這取決於這些技術的成功和採用。

And our next question comes from the line of Tom Diffely with D.A. Davidson.

我們的下一個問題來自 Tom Diffely 和 D.A.戴維森。

Wanted to dig a little deeper into the capital intensity, how much you made Yuval in your prepared remarks. You talked about -- I think it was a 100% increase in capital intensity from [28 down to 7]. Was that just a broad industry number or was that for your tools?

想要更深入地了解資本密集度，您在準備好的發言中讓 Yuval 賺了多少。你談到 - 我認為這是資本密集度從 [28 下降到 7] 增加 100%。這只是一個廣泛的行業數字還是針對您的工具？

Broad industry number.

廣泛的行業編號。

Okay. And I would assume with your etch growing as a percentage and then the complexity of etch in your power supplies on there that you have a faster or higher capital intensity growth rate.

好的。我會假設你的蝕刻按百分比增長，然後你的電源中蝕刻的複雜性會導致你有更快或更高的資本密集度增長率。

It's an assumption. Again, our product intensity, the power content is not only a function of the migration to a next node like, say from 28 nanometer to 10 nanometers, but also is the increase in the stacking of the films in memory and the adoption of new materials. For example, we see the acceleration of adoption of new technologies like atomic layer deposition or atomic layer etch. These are new technologies that will be incremental in terms of the growth. I mean, 5, 10 years ago, people didn't use the atomic layer deposition extensively. So we will see the adoption of new materials and new process technologies as another accelerator. And that will increase the capital intensity.

這是一個假設。同樣，我們的產品強度，功率含量不僅是遷移到下一個節點（例如從 28 納米到 10 納米）的函數，而且還與內存中薄膜堆疊的增加和新材料的採用有關.例如，我們看到原子層沉積或原子層蝕刻等新技術的加速採用。這些新技術在增長方面將是漸進的。我的意思是，5、10 年前，人們並沒有廣泛使用原子層沉積。因此，我們將把新材料和新工藝技術的採用視為另一個加速器。這將增加資本密集度。

Okay. And then moving over to the services side of the business, it sounds like we put a lot of effort into gaining some share from the third-party players in services. Curious on the 28% year-over-year growth, how much of that do you think as you recapturing some share versus just the growth of the marketplace for services?

好的。然後轉向業務的服務方面，聽起來我們付出了很多努力來從服務中的第三方參與者那裡獲得一些份額。對 28% 的同比增長感到好奇，與服務市場的增長相比，您認為在重新奪回一些份額時有多少增長？

We do not delineate that. I think it's a combination of a fewer thrusts in our strategy, the market share gain away from third-party shops by providing value and we care for our customers, and the incremental growth coming from new service products that we develop in our service engineering department.

我們不描述那個。我認為這是我們戰略中較少的推動力、通過提供價值和我們關心客戶而從第三方商店獲得的市場份額以及我們在服務工程部門開發的新服務產品帶來的增量增長的結合.

Okay. And then maybe just finally here on the thin film growth. Just trying to understand a little bit how that's been driven. Is it technology changes and what the customers doing, is it just need for more capacity, or is it -- you mentioned share gains there as well?

好的。然後也許終於在薄膜生長上了。只是想稍微了解一下這是如何驅動的。是技術的變化和客戶在做什麼，只是需要更多的容量，還是——你也提到了那裡的份額增長？

It's really both. You'll find out that a lot of products that you and I use almost every day that historically used to be coated using liquid films or chemical coating, are moving into vacuum coating, which is PVD mainly. And as the technology moves forward, new devices adopt new materials and new techniques for coating. And the main purpose for that is to provide the color, the surface feel and look of the film, of the product. Films that are anti-smear, anti-scratch films, et cetera. So these are new engineered materials. So it is not only capacity, it's also new materials and new methods for depositing these materials and that drive a lot of growth right now.

真的是兩者兼而有之。您會發現，您和我幾乎每天都在使用的許多產品，過去曾使用液體薄膜或化學塗層進行塗層，現在正在轉向真空塗層，主要是 PVD。隨著技術的進步，新設備採用新材料和新工藝進行塗層。其主要目的是提供產品的顏色、表面觸感和薄膜外觀。防污、防刮傷等薄膜。所以這些是新的工程材料。因此，不僅是產能，還有新材料和沈積這些材料的新方法，這推動了現在的大量增長。

(Operator Instructions) And we do have a follow-up question from Krish Sankar with Bank of America.

（操作員說明）我們確實有美國銀行的 Krish Sankar 提出的後續問題。

Two quick ones. Yuval, how much was AMAT and LAM as a percentage of total sales in Q3?

兩個快的。Yuval，AMAT 和 LAM 在第三季度的總銷售額中所佔的百分比是多少？

Krish, it should be in the Q that was filed, that is probably 52%, 53%.

Krish，它應該在提交的 Q 中，大概是 52%、53%。

And then it looks like you have about $75 million in the buyback left. Is it true, and if so, is it open-ended or is there a time frame for it?

然後看起來你還剩下大約 7500 萬美元的回購。這是真的嗎？如果是的話，它是開放式的還是有時間框架的？

The specific authorization Krish, expires in March of '18. That said, we're in discussions with the board to either extend or replace that. So going forward, for capital deployment you should expect both acquisitions and share repurchases.

具體授權 Krish，將於 18 年 3 月到期。也就是說，我們正在與董事會討論擴展或替換它。因此，展望未來，對於資本配置，您應該期待收購和股票回購。

Thank you. And I'm showing no further questions. I'd like return the call to management for any closing remarks.

謝謝。我沒有再提出任何問題。我想將電話轉回管理層以獲取任何結束語。

Thank you everyone for joining us today. As you can see, we're excited about the current and the future. We were very constructive both -- in all the markets we serve and we're very excited about the future. We hope to see you -- many of you soon. Take care.

感謝大家今天加入我們。如您所見，我們對當前和未來感到興奮。我們都非常有建設性——在我們服務的所有市場中，我們對未來感到非常興奮。我們希望很快見到你們——你們中的許多人。小心。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.

女士們，先生們，感謝你們參加今天的會議。這確實結束了程序，你們都可以斷開連接。每個人都有美好的一天。